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December 28, 2004

What Our Leaders Are Paid

The New York Times reports on Washington's revolving door, including Billy Tauzin's move to PhRMA for $2 million per annum which I discussed a few weeks ago, and now the mass exodus from the cabinet back into the private sector. The article links it to continuing debates over the proper level of compensation for top government officials, including whether it lags too far behind comparable private-sector jobs. For figures on current and past compensation for top officials, visit this page at TheCapitol.Net which also includes links to relevant CRS reports.

Here are the 2004 salaries for a few significant federal positions:

President: $400,000

Vice President: $203,000

Cabinet Secretaries: $175,700

Speaker of the House: $203,000

Majority and Minority Leaders of House and Senate, Senate President pro tempore: $175,700

Other Members of Congress: $158,100

Chief Justice: $203,000

Associate Justices: $194,300

Appeals Court Judges: $167,600

District Court Judges: $158,100

Though the article links congressional and executive pay, I think they are different creatures. I have less trouble accepting the current salary for Members of Congress as well as future increases than for cabinet members for one simple reason: Almost all Members of Congress must maintain two residences, often very far from one another. This means, in most cases, renting (or sharing) an apartment at the fairly expensive rates in DC in addition to a home in the district/state where their families live. Moreover, though they get an official travel allowance, that does not cover partners and children. Yes, that salary is well above the median household income (a little over $43,000 in 2003), but few people have these demands, either.

In the case of executive appointments, I have less sympathy since they never have to face the dual household dilemma. In fact, given the negligible restrictions on post-service employment, it is easy for former cabinet members to cash in just like Tauzin did, and like Ridge will now according to the Times. For that reason, I do not buy the argument put forward by some that cabinet salaries must keep pace with executive compensation in the private sector in order to attract top candidates. Because the expected income for a cabinet member almost certainly would be higher after service than before, it is quite easy for them to make up the difference and then some.

The question is, of course, whether we want them to. As the Tauzin case showed us, there are few restrictions to bar the revolving door (with some differences between former Members of Congress and executive appointees). It is difficult if not impossible to demonstrate that a job was promised in order to curry favor with an official, and such cases are rarely pursued beyond a complaint filed by organizations like Public Citizen and Common Cause. At best the revolving door is tawdry and unseemly, and at worst it corrupts and distorts public policy.

It is a losing battle merely to try to tighten those restrictions, however. The 1989 Ethics in Government Act illustrates. At the time the question involved honoraria given to Members of Congress by interest groups, often in the hundreds and thousands of dollars. For those who were not independently wealthy, this was an important source of income, capped at the time at 30% of annual salary for representatives and 40% for senators. More importantly, they were not going to give it up without some kind of trade. So, to bar honoraria in order to shut off one source of interest group influence, Congress increased their salaries to nearly match the lost honoraria.

With a friendly House and Senate right now, including members who are thinking about their own post-congressional jobs, Congress is extremely unlikely to tighten revolving door restrictions on its own. Because it would be viewed as a limit on expected income, salaries would have to increase as well. Similarly, it is a mistake to worry excessively about cabinet salaries without at the same time tightening these regulations. Otherwise it is money for nothing. Since their cabinet service can already be viewed as a long-term net gain, they ought to give up some of that future gain in order to get their higher cabinet salaries in the short term.

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